Vijayawada: Despite licence fee dip, Excise Department rakes in moolah

Despite the government not setting any revenue targets for the Excise Department, it continues to be the biggest money-generating wheel of the state thanks to the never dipping demand for alcohol. Its

Published: 14th January 2018 04:10 AM  |   Last Updated: 14th January 2018 10:08 AM   |  A+A-

By Express News Service

VIJAYAWADA: Despite the government not setting any revenue targets for the Excise Department, it continues to be the biggest money-generating wheel of the state thanks to the never dipping demand for alcohol. Its revenue between April and December, 2017, stood at Rs 4,441.92 crore.

In the corresponding period in 2016, the revenue stood at Rs 3,385.54 crore. However, officials claim the jump was possible only due to  the imposition of additional excise duty, as there was no significant spike in sale volume.

With the government reducing the licence fee of A4 shops by 75 per cent, it lost around Rs 1,500 crore in the beginning of the excise year.

Earlier, the Excise Department used to collect Rs 65 lakh for issuing licence to A4 shops, but the sum was set at Rs 16 lakh in the new excise year which commenced in July, 2017.
Officials came up with the idea of imposing Additional Excise Duty (AED) to recoup income lost on the reduction of licence fee.

This resulted in the department, which is crucial for the government in terms of revenue generation, to not only overcome its losses but also garner about Rs 1,000 crore by December.

An official of the Prohibition and Excise Department told TNIE that there is a misconception that the government is promoting the consumption of liquor to increase its revenue. “It is completely wrong. Related statistics have established that there is no significant growth in liquor sale volume. The revenue increased due to AED,’’ an official said.

Stating that the government got nearly Rs 400 crore as licence fee charges thanks to the spurt in applications following the reduction in licence fee, the official said by reducing the fee they succeeded in destroying syndicate culture in liquor business.

“That is why we have succeeded in the implementation of MRP without any deviation. We have also been able to control illegal liquor outlets (belt shops),” the official said.

Similarly, enhancing the price of liquor, reducing retailers’ margin to 10 per cent from 21 per cent earlier and eliminating illicitly distilled liquor has helped the Department rake in moolah.

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